Why Have a Seperate Payroll Account

With the increase in check printing and a bank-friendly environment comes a golden opportunity for thieves. Payroll checks can be cashed at salons or other public places such as check-cashing outlets. The information on your check provides valuable company information such as bank name, account name, and account holder. By ordering checks from third-party sources or even printing checks on desktops, these thieves can issue checks in small amounts and cash them in at different branches. Discovering this fraudulent transaction may take several weeks or months, unless someone is monitoring the general account on a daily basis. However, by having separate payroll accounts from your general account and transferring the exact net payroll amount to the payroll account, you can easily control such fraudulent transaction. Another advantage is that there will always be funds available for employee’s checks. You may open this account at the same bank as your general account, and putting both of them on the same portfolio, you can take advantage of increasing the “Average Balance”.